Closing system

Benefits of Pebble Mine?? Fool’s Gold, Red Herrings, Failure

Canadian owner of beleaguered Bristol Bay mine releases self-serving economic contribution report that confirms its plan to dramatically increase mine size, mine costs and mine impacts, fails to mention risks to Bristol Bay’s $2.2 billion wild salmon fishery.

Shoal of Salmon in Southwest Alaska

Northern Dynasty Minerals, 100% owner of the widely doomed cobblestone mine, has long maintained that its proposed open pit mine at the head of Bristol Bay in Alaska would be “enhancing” rather than threatening the world famous wild salmon fishery that these pristine waters support. While three successive federal administrations have been at odds – Obama, Trump and now Biden – the underfunded small Canadian company has no other assets and nowhere to go with its shareholders’ investment.

So despite the refusal of a federal permit by the notoriously pro-development Trump administration in November 2020, the battle for Bristol Bay continues.

Last month, in his latest attempt to turn the tide of opposition, Northern Dynasty released their latest red herring: “An Economic Contribution Assessment of the Proposed Pebble Project to the US National and State Economies”, a thin 33-page report prepared by the consultant IHS Markit purporting to document the positive impact of the Pebble mine on the economies of Alaska and from the lower 48 states.

To say the least, it’s a meaningless job, with some flaws of glaring transparency, apparent even to the lay reader. The most obvious is that the assessment is not the “independent expert analysis” that Northern Dynasty has claimed; indeed, as IHS Markit concedes in the Executive Summary, the consultant “used the preliminary planning information provided by [Northern Dynasty] as key inputs for models that assess the potential long-term economic contributions of the Pebble project. It has always been – and remains – reasonable to be skeptical of the company’s self-serving contributions, including most recently its deeply flawed 2021 Preliminary Economic Assessment, relied upon and repeatedly cited by IHS Markit. Further away, almost no supporting documentation is provided to substantiate or substantiate the wildly optimistic economic and employment benefits claimed.

Perhaps most remarkable, the review fails to mentionand even less to credit and integrate into its estimate of the economic impact of the mine, the substantial risk this exceptionally destructive project poses to the health and integrity of the existing $2.2 billion per year fishery in Bristol Bay, which generates approximately 15,000 jobs per year. Whether Northern Dynasty instructed IHS Markit to ignore the project’s threat to Earth’s most productive wild salmon fishing economy or whether the consultant simply did not consider it relevant, the significant point is that IHS Markit omitted from its analysis the central question of economic, environmental, social and cultural concern that has motivated opposition to this project for decades in Alaska and elsewhere.

And there’s more.

Earlier this month, Richard K. Borden, Mining Expert and Former Environmental Manager for Rio Tinto Copper, Copper & Diamonds and Copper & Coal Group, Independently Reviewed Northern Dynasty consultant’s report and noted important findings that can be drawn from the report, even without public access to the templates, underlying inputs, or supporting documentation. These include, for example:

  • an admission by Northern Dynasty of the significant increase in estimated capital cost of the mine (from 6.05 billion dollars to 10 billion dollars),
  • a significant shortening of the period before a major expansion the mine plan currently being sought by Northern Dynasty for licensing (from 20 years to as little as three years from the initial operation of the mine), and
  • an exponential increase in the production of chemically reactive tailings and waste rock, which would increase impacts and risks associated with direct land disturbance, contaminated water management, geotechnical stability and closure.

As Borden summarizes:

  • The report states that the capital costs required to construct a large-scale, long-lived mine at the Pebble deposit would amount to ten billion dollars. This is the first time that a document written or commissioned by [Northern Dynasty] publicly and explicitly stated that the capital cost for the large-scale, long-term development of the ore body would be so high.
  • Construction of the mine expansion is expected to begin as soon as three years after the operation of the [permit application] the starter mine begins.
  • The much larger mining plans required to pay for the large initial capital investment would increase the production of chemically reactive tailings and waste rock by more than ten times compared to the almost certainly uneconomic start-up mine analyzed in the impact study. Environmental Assessment (EIA) and subsequent Preliminary Economic Assessment (PEA) of the project.
  • Even if the expanded mining operation were to operate for only 20 years, the mass production of chemically reactive tailings and waste rock would more than double under the assumptions made in the economic contribution assessment.
  • The assessment does not recognize the threat posed to Bristol Bay’s 14,000 wild salmon fishing jobs and the long-term economic benefits of any mining development in the heart of the watershed.
  • The assessment does not take into account the opportunity costs associated with the development of the Pebble ore body. Ten billion dollars could be invested in other less financially and environmentally risky mining development projects in the United States that could supply the copper needed for the national economy.

Borden’s review is fully linked here.

In examining the balance of costs and benefits of the Pebble mine, the unchanging truth is and has long been that the Bristol Bay watershed is one of the most productive ecosystems on the planet – generating 50 percent of the world’s sockeye salmon each year. According to the Alaska Department of Fish and Game, the expected run next summer is a spectacular record of 73.4 million fisheclipsing the streak of 66 million last summer.

These wild salmon are the Bristol Bay region’s most precious gold – the red gold that for centuries has sustained the people of Bristol Bay, their communities and their wildlife.. There is simply no good reason to risk this national treasure in the hope of speculative economic contributions from a massive and destructive strip mine at the source of such a thriving economic and natural ecosystem.

Northern Dynasty’s latest attempt to resuscitate its project widely condemned by flawed and self-serving economic valuation is yet another red herring in pursuit of fools’ gold.– a program that, as the Army Corps found in rejecting the company’s permit application, “does not meet Clean Water Act guidelines”, “will significantly degrade” the water resources of the region and “is contrary to the public interest”.

We totally agree and we strongly support the action of the EPA for a sustainable protection of the region. The Pebble Mine is a failure. Take action now to stop it forever.